Why the Bank Of America says ETH Merge could drive up institutional adoption.
According to a report published by researchers at the Bank Of America (BAC) on Friday, Ethereum’s (ETH) long-awaited merge to a Proof-of-Stake consensus this week could lead to more institutional adoption in the future.
In the report, it’s explained that with the change to Proof-of-Stake, Ethereum will be removing its miners and instead use validators to stake Ethereum and keep it running. This will, in turn, draw the interest of institutes.
Analysts Alkesh Shah and Andrew Moss wrote in the report, “The ability to stake ETH and generate a higher-quality yield (lower credit and liquidity risk) as a validator or through a staking service rather than on block-box lending/borrowing applications may also drive institutional adoption.“
Related: Top 5 Myths About Ethereum Merge!
Lower Energy Consumption
Another reason why the ETH Merge may draw more institutional interest and adoption is one of the biggest promises that the Merge promises to bring to the blockchain, lower energy consumption.
The Merge is said to promise a 99.95% decrease in energy consumption, decreasing its Carbon footprint and making Ethereum far more environmentally friendly than it was before.
This improvement in environmental impact will encourage institutes that previously felt some level of guilt or were unable to contribute in many blockchains due to its known reputation for ‘being bad for the environment.’
“The significant reduction in energy consumption post-Merge may enable some institutional investors to purchase the token that were previously prohibited from purchasing tokens that run on blockchains leveraging proof of work (PoW) consensus mechanisms,” the report wrote.
The Merge will reduce Ethereum's energy impact by up to 99.95 %. That's over 110 TWh of energy saved annually, or 110 billion kilowatt-hours, equivalent to the annual production of almost 11,000 wind turbines.
— The Metaverse (@themetav3rse) September 12, 2022
With the Ethereum Merge cutting so much of its energy consumption and building to create many new upgrades in the future, many in the community seem optimistic at the prospect of Ethereum in the future.